The Benefit of a One-Unit Increase in an Activity

question 226

Multiple Choice

The benefit of a one-unit increase in an activity

• A) is called marginal cost.
• B) is always greater than the opportunity cost of that activity.
• C) decreases as you do more of it.
• D) is measured by what you must give up.
• E) is called "sunk benefit."

---

Definitions:

Operating Cash Flows

The cash generated from the normal operations of a business, such as revenue from sales after operating expenses are deducted.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or sold within a year.

Salvage Value

The projected remaining worth of an asset upon reaching the end of its serviceable life.

Straight-Line Depreciation

A formula for distributing the cost of a tangible asset over its period of usability in consistent annual sums.